The New York subsidiary netted $16.6 million in the second quarter of 2002, up 5% from the $15.8 million netted in the parallel quarter of last year, and 3% up from the previous quarter.

Discount New York, which Israel's other banks are vying to buy, ended the first half on a net $32.6 million.

During the quarter, Discount New York increased its assets under management by 2% versus year-end 2001, to $6.131 billion.

The company's equity increased 6% from the prior quarter to $511 million, according to data appearing on the Federal Deposit Insurance Corporation website.

The bidders for Discount New York include Bank Hapoalim (TASE: POLI ) , Bank Leumi (TASE: LUMI ) , and the Safra banking family who control First International Bank of Israel (TASE: FIBI) .

Discount decided to sell its New York subsidiary, even though t is the crown jewel in the group, in order to solve its immediate capital adequacy ratio, which is hampering its day-to-day operations.

The parent bank, Discount, will be publishing its second-quarter results tomorrow, Thursday. Analysts expect it to report a loss of over NIS 40 million.

Discount New York has been managed for six years by Arie Sheer, its CEO and president. Under his stewardship its profitability gradually increased, from $31.2 million in 1997 to $62.5 million in 2001. It has become the eighth biggest bank in the state of New York, and is the biggest of all the Israeli banks abroad. It operates throughout the United States and runs representative offices in South and Central America.

The Finance Ministry has objected to Discount's sale of its New York asset, on the grounds that privatizing the entire group would be harder. Bank Hapoalim pointed out that nobody is bidding for the entire group.